a

GAO

United States Government Accountability Office

Report to Congressional Committees

November 2005 VALLES CALDERA

Trust Has Made Some 

Progress, but Needs to 

Do More to Meet 

Statutory Goals

GAO-06-98
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2005

VALLES CALDERA

Trust Has Made Some Progress, but 

Needs to Do More to Meet Statutory 

Goals 

Highlights of GAO-06-98, a report to 

congressional committees 

In 2000, Congress authorized the 

purchase of the Valles Caldera (the

Caldera) in north-central New 

Mexico. The Valles Caldera Trust 

(Trust), a wholly owned 

government corporation, is to 

become financially self-sustaining

and to manage the Caldera for

multiple purposes while sustaining

the land’s valuable natural 

resources. GAO was mandated to

assess the progress the Trust is 

making in meeting its statutory 

goals. 

What GAO Recommends

To help ensure that the Trust meets 

its goals and establish a more

effective management control 

program, GAO recommends that

the Trust’s Board of Trustees 

develop (1) a strategic and

performance plan that identifies 

measurable goals and objectives

for protecting and preserving the 

Caldera, providing recreation, 

sustaining yield, and becoming 

financially self-sustaining; (2) a

plan for becoming financially selfsustaining; (3) periodic 

performance monitoring and 

reporting that enable Congress and

the Trust to track progress in 

achieving program goals; and (4) a

plan to fill vacant positions. 

GAO also recommends that the 

Board obtain the required financial 

audit for 2005 and report on the 

status of the audit in its 2006 

annual report to Congress. 

In commenting on the draft report, 

the Board generally agreed with 

GAO’s recommendations. 

The Trust has made progress in meeting its goals to preserve and protect the 

Caldera for future generations as well as to provide for public recreation and 

sustained yield management. Specifically, it has (1) established a basic 

organization with about 25 staff; (2) drafted policy and procedures and 

contracted with the Department of the Interior’s National Business Center 

for accounting services; (3) begun engineering and construction efforts to 

address infrastructure problems—roads, water systems, fences, and 

buildings; (4) established interim grazing and recreation programs; and (5) 

implemented an adaptive management approach that focuses on making 

management decisions based on scientific data. 

The Trust, however, still has much work to do to meet its goals, including 

achieving a financially self-sustaining operation. Specifically, the Trust has 

not yet developed the following: 

• Strategic and performance plans with measurable goals and objectives.

For example, the Trust must decide on the level of activities (e.g.,

grazing, hiking, and hunting) that will be allowed without seriously 

harming the land’s resources, and yet will still provide sufficient 

recreational activity and sustained yield management. The Trust also 

must select additional opportunities for generating revenues, such as 

securing private donations. 

• Plans to manage program risks. The Trust has not addressed program 

risks, including fire and legal liabilities. For example, the Trust lacks a 

fire plan, which would outline a decision-making process for responding 

to fires, and has not obtained liability coverage. Because it did not have 

a fire plan, the Trust spent about $338,000 in May 2005 to suppress a fire, 

which, in the opinion of the Forest Service Region 3 Fire Manager, could 

have been left to burn because the fire did not threaten any key 

resources or public infrastructure. Also, because it has not obtained 

liability coverage, the Trust has restricted the number of Caldera visitors.

• Mechanisms for monitoring progress. Among other things, the Trust 

has not had annual financial audits and has not prepared performance 

reports that would help it assess its progress toward meeting its financial 

and other goals. 

The Trust’s efforts to raise the revenues needed to bring it closer to meeting

its financial self-sustainability goal could be undermined by one or more of 

these issues. Frequent turnover in Board members and key staff has 

contributed to the problems experienced to date. 

www.gao.gov/cgi-bin/getrpt?GAO-06-98.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robin Nazzaro 

at (202) 512-3841 or nazzaror@gao.gov. 
Page i GAO-06-98 The Valles Caldera Trust

Contents

Letter 1

Results in Brief 3

Background 5

The Trust Is Making Progress toward Preserving and Protecting the 

Caldera and Providing Recreation and Sustained Yield 

Management 9

The Trust Has Much Work to Do to Meet Its Statutory Goals 22

Conclusions 29

Recommendations for Executive Action 30

Trust Comments and Our Evaluation 31

Scope and Methodology 33

Appendixes

Appendix I: Comments from the Valles Caldera Trust 36

Appendix II: Guiding Principles of the Valles Caldera Trust 40

Appendix III: GAO Contact and Staff Acknowledgments 42

Tables Table 1: Level of Livestock Grazing on the Caldera, Calendar Years 

2002 through 2005 14

Table 2: Public Participation in Recreation Programs, Calendar 

Years 2002 through 2004 15

Table 3: Revenue Collected, by Program Activity, Fiscal Year 

2004 23

Table 4: The Trust’s 15-Year Strategy for Achieving a Financially 

Self-Sustaining Operation 25

Table 5: Turnover of Key Trust Staff in 2004 and 2005 29

Figures Figure 1: Valle Grande Viewed from Redondo Peak 5

Figure 2: The Caldera, Santa Fe National Forest, and Bandelier 

National Monument 6

Figure 3: Valles Caldera Trust’s Proposed Organization, as of 

September 2005 10

Figure 4: Portion of the Main Access Road to the Caldera after 

Rehabilitation 12

Figure 5: Historic Commissary on the Caldera 13

Figure 6: Inventory and Monitoring Sites on the Caldera 18

Figure 7: Fenced Riparian Area on the Caldera 20
Contents

Page ii GAO-06-98 The Valles Caldera Trust

Abbreviations

Control Act Government Corporation Control Act

EIS Environmental Impact Statement

NBC National Business Center

NEPA National Environmental Policy Act

Preservation Act Valles Caldera Preservation Act

Results Act Government Performance and Results Act

StARS Stewardship Action Record System

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Page 1 GAO-06-98 The Valles Caldera Trust

United States Government Accountability Office

Washington, D.C. 20548

A

November 16, 2005 Letr

Congressional Committees

The Valles Caldera Preservation Act (Preservation Act) of 2000 authorized 

the federal government’s purchase of about 89,000 acres of privately owned 

land in north-central New Mexico, known as the Baca Ranch.1

 The federal 

government acquired this property, referred to as the Valles Caldera 

(Caldera) for about $97 million. Scientifically, the Caldera has served as a 

model for geological studies of this and other volcanic areas around the 

world. Culturally and historically, the Caldera has had religious significance 

for Native Americans since prehistoric times because of its plentiful water 

resources in an otherwise arid region and because it provided a major 

source of black volcanic glass (obsidian), which was widely used for tools 

and weapons. Recreationally, the Caldera’s landscape is noted for its 

opportunities for hiking, cross-country skiing, backpacking, bicycling, 

hunting, and fishing. Commercially, it provides ranchers with forage for 

livestock. Since the Caldera’s acquisition through fiscal year 2005, the 

Valles Caldera Trust (Trust), established under the Preservation Act, has 

received about $16 million in federal funding to operate and maintain the 

Caldera.

As stated in the Preservation Act, the Trust is to be governed by a Board of 

Trustees (Board) responsible for managing the Caldera as a national 

preserve. Until the Trust could be organized, however, management of the 

Caldera was provided by the U.S. Department of Agriculture’s Forest 

Service. The Secretary of Agriculture was to transfer management 

responsibility to the Trust once the Board was able to conduct business and 

provide for essential management services. The transfer occurred in 

August 2002. The Preservation Act also charged the Trust with managing 

the land to achieve a number of goals, including the following:

• protecting and preserving the Caldera’s scientific, scenic, historic, and 

natural values, including rivers and ecosystems, and archaeological, 

geological, and cultural resources for future generations;

• providing opportunities for public recreation;

1

Pub. L. No. 106-248, Title. I. 
Page 2 GAO-06-98 The Valles Caldera Trust

• providing for sustained yield management of the ranch for timber 

production and domesticated livestock grazing insofar as those were 

consistent with its other responsibilities; and 

• becoming financially self-sustaining within 15 years of the purchase 

date—that is, by 2015.

The Preservation Act also established the Trust as a wholly owned 

government corporation subject to the Government Corporation Control 

Act (Control Act).2

 The Trust is also subject to the Government 

Performance and Results Act (Results Act).3

 Under the Control Act, the 

Trust must obtain independent annual financial audits and report annually 

to Congress. Under the Results Act, the Trust must prepare a strategic plan 

and an annual performance plan with measurable goals and objectives, and 

submit annual performance reports to Congress and the President. 

The Preservation Act requires GAO to provide two reports to Congress on 

the Trust’s activities: an interim report 3 years after the Trust assumed 

management responsibility and a final report 4 years later. For this interim 

report, we examined the (1) Trust’s accomplishments since its inception 

and (2) work that remains for the Trust in order to meet its goals under the 

act, including the goal of becoming financially self-sustaining. 

To address these issues, we analyzed information and interviewed officials 

from the Forest Service and the Trust on the programs and activities the 

Trust has initiated since assuming management of the Caldera. We also 

analyzed documents, financial records, and other information, and visited 

the site to observe the actions taken to date toward meeting the Trust’s 

statutory obligations. In addition, we analyzed the requirements of the 

Control Act and the Results Act for government corporations. The financial 

statements of the Trust have not been independently audited. We 

conducted limited testing of these data and discussed these data with key 

Trust officials. We describe issues related to these financial data in the 

body of this report. We assessed and determined that the nonfinancial data, 

such as participation in recreation activities and levels of livestock grazing, 

were sufficiently reliable for the purposes of this report. We conducted our 

2

31 U.S.C. § 9100 et seq.

3

Pub. L. No. 103-62 (1993).
Page 3 GAO-06-98 The Valles Caldera Trust

work from January 2005 through October 2005 in accordance with 

generally accepted government auditing standards. 

Results in Brief Since 2000, the Trust has made progress in meeting its goals of preserving 

and protecting the Caldera for future generations as well as of providing for 

public recreation and sustained yield management. To advance these goals, 

the Trust established a basic organization with about 25 staff and drafted 

policy and procedures—including guiding management principles and a 

management framework; it also contracted with the Department of the 

Interior’s National Business Center for accounting services. On the Caldera, 

the Trust began engineering and construction efforts to address 

infrastructure problems—roads, water systems, fences, and buildings—to 

make the Caldera more accessible for resource management, recreation, 

and commercial uses. In addition, since 2002, the Trust has granted access 

to the public through its interim grazing and recreation programs. To 

preserve the land and implement environmental protection requirements, 

the Trust uses science-based adaptive management—an approach under 

which management decisions are based on site-specific scientific data, 

evaluated for impact, and adjusted in response to these evaluations. 

Despite the progress made, the Trust has much work to do to meet its goals 

under the Preservation Act, including achieving a financially self-sustaining 

operation. Specifically, the Trust has not yet developed the following:

• Strategic and performance plans with measurable goals and objectives

for (1) protecting and preserving the scientific, scenic, historic, and 

natural values of the Caldera; (2) providing opportunities for public 

recreation; (3) providing for sustained yield management of the ranch 

for timber production and domesticated livestock grazing; and (4) 

becoming financially self-sustaining. Strategic and performance 

planning processes can help highlight mission conflicts for decision 

makers. For example, the Board must decide on the level of activities 

(e.g., grazing, hiking, and hunting) that will be allowed so as to not 

seriously harm the land’s resources, yet provide sufficient recreational 

activity and sustained yield management, and must select additional 

opportunities for generating revenues, such as securing private 

donations. 

• Plans to manage program risks, including losses due to fire and legal 

liabilities that could undermine the Trust’s ability to meet its goals. For 

example, the Trust lacks a comprehensive fire plan outlining a decision-
Page 4 GAO-06-98 The Valles Caldera Trust

making process for responding to naturally occurring fires. As a result, 

the Trust spent about $338,000 in May 2005 to suppress a fire that could 

have been left to burn because it did not threaten any key resources or 

public infrastructure, in the opinion of the Forest Service Region 3 Fire 

Manager. The Trust has not obtained liability coverage because it is 

uncertain of its legal authority to do so. As a result, the Trust has 

restricted the number of visitors to the Caldera.

• Mechanisms for monitoring progress, such as annual financial audits 

required by the Control Act and performance reports required by the 

Results Act, would help the Trust assess its progress toward meeting its 

financial and other goals. 

Any one or a combination of these problems could undermine the Trust’s 

efforts to raise the revenues needed to bring it closer to meeting its selfsustainability goal or other goals. Also, the Trust has experienced 

significant turnover of Board members and key staff, which has 

contributed to delays in implementing the goals under the act. 

To establish a more effective management control program, we are 

recommending that the Board develop a strategic and performance plan 

with measurable goals and objectives, a plan for becoming financially selfsustaining, performance monitoring mechanisms, and a plan for timely 

replacement of personnel, prior to devoting additional resources to other 

activities. We are also recommending that the Trust obtain an audit of its 

2005 financial statements and report the results to Congress. 

In commenting on a draft of this report, the Board generally agreed with 

the accuracy of the findings, validity of the conclusions, and soundness of 

the recommendations. The Board also provided additional information 

regarding its efforts to address strategic planning, program risks related to 

fire and legal liabilities, Board member and staff turnover, and financial 

self-sustainability. With regard to the issue of financial self-sustainability, 

the Board disagreed with our statement that financial self-sustainability 

was not a priority and noted that this goal is considered to be of equal 

priority to other goals it has to achieve. To avoid ambiguity, we revised the 

language in the report to state that the Trust considers the selfsustainability goal as one of many goals of equal priority. We also added 

language in the report stating that the Trust can use its own funds to 

purchase liability insurance.
Page 5 GAO-06-98 The Valles Caldera Trust

Background About 1.2 million years ago, a volcano erupted and collapsed inward, 

forming the crater now known as the Valles Caldera, in north-central New 

Mexico. This geologically and ecologically unique area covers about 89,000 

acres of meadows, pine forests, hot springs, volcanic domes, and streams 

that support elk herds and other wildlife and fishery resources. Figure 1 

shows a view of Valle Grande from Redondo Peak, the highest elevation 

within the Caldera. 

Figure 1: Valle Grande Viewed from Redondo Peak

The Caldera comprises the formerly private lands known as the Baca 

Ranch and is almost entirely surrounded by the Santa Fe National Forest 

and Bandelier National Monument. Figure 2 shows the location of the 

Caldera in relation to the Santa Fe National Forest and Bandelier National 

Monument.

Source: Valles Caldera Trust.
Page 6 GAO-06-98 The Valles Caldera Trust

Figure 2: The Caldera, Santa Fe National Forest, and Bandelier National Monument

96

84

68

30

502

4

285 

84

550

14

285

25

40

Santa Fe National Forest

Santa Fe National Forest

Jemez 

Springs Main gate

Sam Isidro

Bernalillo

Albuquerque

Santa Fe

Espanola

Abiquiu

Taos

Coyote

Cuba

Los Alamos

Cochiti Pueblo

10 10 Miles 5 0

Mileage to the preserve main gate on 

New Mexico Highway 4: 

from Albuquerque: 75 miles

from Santa Fe: 53 miles

from Los Alamos: 18 miles

from Jemez Springs: 20 miles

Bandelier 

National 

Monument

4

Source: Valles Caldera Trust.

Valles Caldera

National Preserve
Page 7 GAO-06-98 The Valles Caldera Trust

The owners of the Baca Ranch operated it as a working ranch, providing 

grazing for their own cattle and, for a fee, for livestock owned by other 

parties. According to the Preservation Act, the working ranch arrangement 

was to continue after the federal government purchased the ranch. In 

managing the Caldera, the Trust is to protect and preserve the land while 

attempting to achieve a financially self-sustaining operation. “Financially 

self-sustaining,” as defined by the act, means that management and 

operating expenditures—including trustees’ expenses; salaries and 

benefits; administrative, maintenance, and operating costs; and facilities 

improvements—are equal to or less than proceeds derived from fees and 

other receipts (including interest on invested funds) for resource use and 

development. Appropriated funds are not to be considered. To carry out its 

duties, the Trust has the authority to solicit and accept donations of funds, 

property, supplies, or services from any private or public entity; negotiate 

and enter into agreements, leases, contracts, and other arrangements with 

any individual or federal or private entity; and consult with Indian tribes 

and pueblos on matters that may affect them. 

The Trust is managed by a nine-member Board. The President appoints 

seven members, and the other two members are the Supervisor of the 

Santa Fe National Forest and the Superintendent of the Bandelier National 

Monument. Of the seven presidential appointees, who are selected in 

consultation with the New Mexico congressional delegation, five must be 

New Mexico residents. Appointees are to be selected based on their 

expertise or experience. Generally, one individual must be appointed with 

knowledge of or experience in each of the following: (1) livestock and 

range management; (2) recreation management; (3) sustainable 

management of forest lands for commodity and noncommodity purposes; 

(4) financial management, budget and program analysis, and small business 

operations; (5) cultural and natural history of the region; (6) nonprofit 

conservation organizations concerned with Forest Service activities; and 

(7) state or local government activities in New Mexico, with expertise in 

the customs of the local area. Board members are generally appointed to 4-

year terms and can be reappointed; however, no Board member may serve 

more than 8 consecutive years. The Trustees select a chairman from the 

Board’s members. An executive director, who is hired by the Board, 

oversees the Trust’s day-to-day operations. The Board must hold at least 

three public meetings a year in New Mexico.

Under the Control Act, the financial statements of a government 

corporation must receive an independent financial audit annually in 

accordance with generally accepted government auditing standards. In 
Page 8 GAO-06-98 The Valles Caldera Trust

addition, agencies must submit annual management reports to Congress 

that include a statement of financial position, a statement of operations, a 

statement of cash flow, a budget report reconciliation, a statement on 

management controls, a report on the results of the annual financial audit, 

and other necessary information about the operations and financial 

condition. 

The Results Act requires agencies to develop strategic and performance 

plans, measure performance, and report annually to Congress. The Results 

Act shifts the focus of an agency’s operations from reporting on activities 

toward achieving results. It requires a results-oriented strategic planning 

process with clearly defined strategic objectives linked to measurable 

performance goals and the collection of information to monitor and 

evaluate the programs. A strategic plan should contain the organization’s 

mission statement and strategic goals, a description of the means and 

strategies that will be used to achieve the goals, a description of the 

relationship between annual performance goals and the organization’s 

strategic goal framework, the identification of key factors that could affect 

achievement of the strategic goals, a description of program evaluations 

used in preparing the strategic plan, and a schedule for future program 

evaluations. The annual performance plan articulates measurable goals for 

the upcoming fiscal year that are aligned with an organization’s long-term 

strategic goals. The annual performance report compares an organization’s 

performance with performance goals for the past year.4

 Implementation of 

the Results Act requirements enables managers to improve accountability, 

effectiveness, service delivery, and internal management, and to provide 

better information to Congress.

A more effective management control program, as we have defined it for 

the purposes of this report, would encompass the requirements of the 

Control Act and the Results Act. These requirements include, among other 

things, (1) a strategic plan, (2) performance plans with measurable goals 

and objectives, (3) the identification and mitigation of program risks, (4) 

performance monitoring and reporting, and (5) annual audits. 

4

OMB, Preparation and Submission of Strategic Plans, Annual Performance Plans, and 

Annual Program Performance Reports, Circular No. A-11, part 6 (Washington, D.C., June 

2005).
Page 9 GAO-06-98 The Valles Caldera Trust

The Trust Is Making 

Progress toward 

Preserving and 

Protecting the Caldera 

and Providing 

Recreation and 

Sustained Yield 

Management

As required under the Preservation Act, the Board has taken steps to 

establish and implement management policies to achieve the goals of 

preserving and protecting the Caldera and providing for public recreation 

and sustained yield management. In particular, the Board (1) established a 

basic organization, (2) began to address infrastructure problems, (3) 

granted limited access to the public through its interim grazing and 

recreation programs, and (4) established an adaptive management 

framework. 

The Board Established the 

Trust Organization

Between January 2001—the Board’s first meeting—and September 2001, 

the Board met regularly and held listening sessions with the general public 

to obtain views on how the Caldera should be managed. Separately, the 

Board met with representatives of local Indian tribes and pueblos. Using 

the information from these sessions, in December 2001, the Board issued 

10 guiding principles for future decision making. These guiding principles, 

which are listed in appendix II, include a commitment to fair and affordable 

access for all permitted activities. At the same time, however, the Board 

stated that it would emphasize the quality of Caldera experiences over 

quantity, which could limit activities and fees. 

From January 2001 through August 2002, the Forest Service served as the 

interim manager, and the Board and employees from the Forest Service and 

other federal agencies conducted the Trust’s work. In October 2001, the 

Board hired its first employee, an executive director. During that year, the 

Trust’s office was located at the Santa Fe National Forest offices. The Trust 

officially assumed management of the Caldera in August 2002, after it 

provided for essential management services, including establishing staff, 

beginning business operations, and adopting management policies and 

procedures. During 2002, the Board drafted personnel and procurement 

policies and procedures as well as policies for environmental protection. It 

also drafted a tribal access and use policy to ensure access to the Caldera 

for religious and cultural purposes, as authorized by the Preservation Act. 

By the end of fiscal year 2002, the Trust had 7 employees, including 

business and resource managers. At the time of our review in 2005, the 

Trust was reorganizing under a new executive director and employed about 

25 permanent and limited-term employees. Figure 3 shows the Trust’s 

proposed organization, as of September 2005. 
Page 10 GAO-06-98 The Valles Caldera Trust

Figure 3: Valles Caldera Trust’s Proposed Organization, as of September 2005

Note: As of October 2005, the Board had not officially approved this organizational proposal.

In addition, the Trust published its final management framework in May 

2005. This document, entitled The Framework and Strategic Guidance for 

Comprehensive Management, describes the history and natural features of 

the Caldera, the goals of the Preservation Act, and the Trust’s approach for 

land stewardship, decision making, and public involvement. It further 

describes a range of potential public uses of the Caldera, from hunting and 

fishing to hiking and camping. 

From its inception through fiscal year 2003, the Trust maintained its 

financial accounts on the Forest Service’s financial system. However, in 

2003, the Board decided to obtain an independent financial system for the 

Trust. The Trust contracted for financial services on the Oracle Federal 

Policy guidance

(Board of Trustees)

Trust management 

(Executive Director)

Planning and 

environmental 

compliance

Volunteer 

coordination

Geographic 

information 

systems

Preserve 

management

Science planning 

and management

Natural resource 

planning and 

management

Cultural resource 

planning and 

management

Research Archaeology

Inventory

Monitoring

Grazing planning 

and management

Recreation planning 

and management

Information 

technology Accounting

Human 

resources

Office 

administration

Purchasing

Landscape 

architecture

Financial and 

administrative 

management

Facility and fleet 

management

Public information, 

outreach, education

Administrative 

assistance

Source: Valles Caldera Trust.
Page 11 GAO-06-98 The Valles Caldera Trust

Financial System managed by the Department of the Interior’s National 

Business Center—an option the Trust considered to be more cost-effective 

than developing a system in-house.5

 Beginning with fiscal year 2004, the 

Trust maintains its financial information on that system. 

Infrastructure Surveyed and 

Potential Solutions to 

Problems Identified 

Shortly after the federal government assumed ownership of the Caldera, 

the Trust learned that the existing infrastructure—roads, buildings, fences, 

and water treatment facilities—was seriously degraded and would have to 

be rehabilitated before it could provide public access to the Caldera. The 

Trust began the rehabilitation work in 2002. 

Roads. The Caldera has an estimated 1,200 miles of roads, including 200 

miles for the main access roads. Most of these roads had been constructed 

with little planning or engineering and had been used to support logging 

operations. They could not be readily used to support administration, 

ranching, recreation, and other needs. In 2002, 3.5 miles of Road 1, the main 

access road, and five key bridges were upgraded to all-weather commercial 

gravel standards; work on the this road was completed in 2003. Road 2—a 

10.2-mile access road—was upgraded in 2004 and 2005. Road work will 

continue as needs are identified and resources become available. Figure 4 

shows a portion of the main access road to the Caldera after rehabilitation.

5

Interior’s National Business Center (NBC) uses its information systems to provide 

computer-processing services to other federal agencies. Under cross-servicing agreements, 

NBC develops and operates administrative and financial systems (including 

payroll/personnel, administrative payments, accounts receivable, property management, 

and accounting) for the Department of the Interior as well as for more than 30 other federal 

organizations.
Page 12 GAO-06-98 The Valles Caldera Trust

Figure 4: Portion of the Main Access Road to the Caldera after Rehabilitation

Buildings, fences, and other facilities. From 2002 to 2005, the Trust 

conducted minor maintenance on the ranch buildings used to house 

employees. In 2002 and 2003, the Trust repaired the Caldera’s 54 miles of 

boundary fence and installed restricted access signs. In 2004, it assessed 

the layout and condition of 64 miles of interior fences. The height of the 

fences was shortened in many areas to allow for elk movement. The Trust 

also installed scenic vistas and kiosks on New Mexico Highway 4, the main 

access road to the Caldera, to allow public viewing of the Caldera. Other 

facilities—such as livestock corrals—were also assessed and rehabilitated. 

Figure 5 shows a historic building constructed in 1909 and used as a 

commissary where ranch hands could purchase supplies on the Caldera.

Source: Valles Caldera Trust.
Page 13 GAO-06-98 The Valles Caldera Trust

Figure 5: Historic Commissary on the Caldera

Water treatment facilities. When the federal government acquired the 

Caldera, the existing water treatment facility was not functioning and the 

Caldera did not have potable water. Rehabilitating the system became a top 

priority for the Trust. Repairs to the water collection and filtration system 

were completed in 2004, and work was ongoing to repair the water 

distribution system in 2005. As currently scheduled, potable water will be 

available in the spring of 2006. 

The Trust Implemented 

Interim Grazing

According to the Preservation Act, the Trust is to provide for livestock 

grazing consistent with the other purposes of the act. The grazing program, 

begun in 2002 as a 5-week drought-relief program, has been operating 

under an interim livestock management plan, which is effective through 

calendar year 2005. Until it can develop a more comprehensive strategy, the 

Trust has established an interim grazing program that allows grazing for 

Source: Valles Caldera Trust.
Page 14 GAO-06-98 The Valles Caldera Trust

between 1 and 2,000 cattle, depending on the condition of the forage. This 

level is lower than the private owners had allowed—up to 6,000 cattle 

during the spring, summer, and fall grazing seasons. Table 1 shows the level 

of livestock grazing through 2005 (estimated) by calendar year.

Table 1: Level of Livestock Grazing on the Caldera, Calendar Years 2002 through 

2005 

Source: GAO analysis of Trust data.

a

The Trust replaced the cow-calf pair program in 2004 with the Conservation Stewardship Program, 

which requires grazing applicants to demonstrate that they have conservation initiatives on their own 

land. 

b

An animal unit month (AUM) is the computed amount of forage (vegetation such as grass and shrubs) 

that a cow and her calf eat in a month. 

Two of these grazing programs—Conservation Stewardship and 

Replacement Heifers—are designed, in part, to introduce local ranchers to 

more prudent management practices. Under the stewardship program, 

which replaced the cow-calf program, applicants have to demonstrate that 

they will implement projects on their own lands to improve the condition of 

the range while their cattle graze on the Caldera. The largest participant in 

the program, the Pueblo of Jemez, implemented major range improvements 

on its own lands, such as reseeding and resting rangeland. The 

Replacement Heifer Program allows ranchers to graze heifers on the 

Caldera and have the heifers bred with the Trust’s registered bulls, which 

are certified to produce calves with low birth weights. The program is 

designed to improve the genetics of local herds and to protect the heifers 

from dying or suffering other complications when they give birth. 

Components of the grazing 

program 2002 2003 2004

2005

(estimated)

Cow-calf pairs 703 305 a a

Conservation Stewardship Program 

(number of cattle) 205 198

Replacement Heifer Program

(number of cattle) 375 461 402

Duration of grazing season (months) 1.25 4 4 4

Animal unit monthsb 879 2,270 2,621 2,354
Page 15 GAO-06-98 The Valles Caldera Trust

The Trust Has Established 

Interim Recreation 

Programs

The Trust granted limited public access through recreation programs 

beginning in 2002. Recreation activities offered have included, for example, 

hunting, fishing, hiking, cross-country skiing, snowshoeing, sleigh rides, 

wagon rides, and horseback riding. In most cases, the Trust charged fees 

for access to the Caldera. Table 2 shows the level of public participation in 

the various recreation programs from calendar years 2002 through 2004. 

Participation in recreation activities is expected to increase for 2005. As 

shown in table 2, the Trust offered limited recreational opportunities in 

2002—a total of 1,920 participants. However, in 2004, participation in 

recreation activities increased more than fourfold over the 2002 level. The 

fishing program hosted the most visitors over the period, or approximately 

26 percent of total visitors. Elk hunting/antler collection and hiking were 

also popular, each representing about 21 percent of visitor participation, 

followed by wagon/sleigh rides at about 15 percent. 

Table 2: Public Participation in Recreation Programs, Calendar Years 2002 through 

2004

Sources: Valles Caldera Trust staff and annual reports to Congress. 

Public participation

2002

participants

2003

participants

2004

participants

Total

participants

by activity,

2002 through

2004

Fishing permits and clinics 1,785 2,107 3,892

Elk hunting and elk-antler 

collection 1,470 1,040 689 3,199

Hiking 200 1,296 1,620 3,116

Wagon and sleigh rides 250 447 1,520 2,217

Van and group tours 353 1,306 1,659

Mountain biking 440 440

Horseback riding 

(equestrian program) 215 215

Skiing and snowshoeing 64 142 206

Stargazing lectures 71 70 141

Seminars, workshops, and 

overnight photo excursions 87 87

Bird watching 14 14 28

Total participants 1,920 5,070 8,210 15,200
Page 16 GAO-06-98 The Valles Caldera Trust

Fishing and fishing clinics. Two streams on the Caldera are suitable for 

fishing. In 2003, the Trust granted fishing access to 1,785 participants on a 

first-come, first-served basis. With increased demand in 2004, the Trust 

used a lottery system to award access to 2,107 participants. In addition, the 

Trust hosted youth and adult fishing clinics in both years. 

Elk hunting and antler collection. The Trust worked with the New Mexico 

Department of Game and Fish to set the numbers of available elk-hunting 

licenses and used a lottery and auction to award licenses. Participation in 

elk hunts has declined each year because of the New Mexico Department 

of Game and Fish decided to decrease the number of hunting licenses 

available to sustain a viable elk herd. In addition to the elk hunt, the Trust 

has offered area youth groups the opportunity to collect antlers shed by elk 

each year. These groups sell the antlers, which are generally used to make 

decorative items, such as lamps, and the groups use the proceeds to 

support nonprofit programs. 

Hiking. Beginning in 2002, the Trust provided guided hiking through a 

contractor to enable public access to the Caldera before it developed the 

infrastructure needed for general public access. In 2003 and 2004, the Trust 

implemented its own hiking program, expanded the activity boundaries for 

hiking, and established unguided hikes as an option. In 2005, the Trust 

increased the number of trails available for hikers on the Caldera. In total, 

the Trust now has 24 miles of trails available for hikers.

Wagon and sleigh rides. The Trust offered horse-drawn wagon and sleigh 

rides to visitors. The horse-drawn rides allow greater access to areas in the 

Caldera. Wagon rides can occur year-round, while sleigh rides, of course, 

need sufficient snowfall. Participation in wagon and sleigh rides has 

increased more than sixfold, from 250 in 2002 to 1,520 in 2004. Also in 2004, 

the Trust donated wagon rides on the Caldera as a prize for a charity 

auction. 

Other recreation. In 2003, the Trust added van tours, snowshoeing, crosscounty skiing, bird watching, and stargazing lectures. In 2004, the Trust 

implemented an equestrian program, so that riders could transport their 

own horses to the Caldera for rides on designated trails. Over 200 riders 

participated. Also in 2004, the Trust added mountain biking, group tours 

and seminars, workshops, and overnight photo- and bird-watching 

excursions.
Page 17 GAO-06-98 The Valles Caldera Trust

The Trust Set Up a ScienceBased Adaptive 

Management Framework

The Trust is using a science-based adaptive management framework for the 

Caldera, which many believe to be a potentially effective approach to 

managing the land. Under this approach, the Trust will make land 

management decisions on the basis of scientific research and monitoring, 

taking into account the public’s views and federal environmental 

requirements. The foundation of this management approach is inventorying 

natural resources, monitoring environmental changes that result from the 

Trust’s programs, conducting research that will primarily help manage the 

Caldera’s resources, and complying with federal environmental 

requirements. 

Inventories. Little information was available about the Caldera’s resources 

when the federal government acquired the Caldera. As a result, in 2001, the 

Trust—using volunteers and employees detailed from other federal 

agencies—began to inventory the Caldera’s vegetation and forest, wildlife 

and fisheries, geology, and other resources. Some of these baseline 

inventories have several components. For example, the wildlife inventory 

includes components by species, such as mammals, reptiles, and fish. Some 

inventory components have been completed, while others are still ongoing 

and are scheduled to be completed during 2007. Figure 6 shows the current 

inventory and monitoring locations on the Caldera. 
Page 18 GAO-06-98 The Valles Caldera Trust

Figure 6: Inventory and Monitoring Sites on the Caldera 

Source: Valles Caldera Trust.
Page 19 GAO-06-98 The Valles Caldera Trust

In addition, about 5 percent of the Caldera has been surveyed for cultural 

resources. As a result of recent surveys, 25 previously unknown historic 

properties have been discovered. For example, scientists have identified 

prehistoric sites showing evidence of toolmaking using obsidian. The 

cultural inventory is ongoing, and its completion date has not been 

established because future construction plans are uncertain. According to 

the Caldera’s cultural program coordinator, planned surveys can be delayed 

because of the need to survey areas slated for construction, such as roads. 

Monitoring. The monitoring program is intended to assess the impact that 

grazing, fishing, forest thinning, prescribed fire programs, and other 

activities have had on the Caldera. For example, the Trust is monitoring 

areas it has fenced along streambeds to prevent elk and cattle grazing in 

order to better understand the impacts of grazing on areas that are not 

fenced off. Figure 7 shows a fenced riparian area on the Caldera. The Trust 

is also monitoring the effects of natural and nonprogrammatic factors, such 

as changes in climate and species populations, especially nonnative 

populations. For example, as part of this program, the Trust established 

five weather stations to monitor rainfall, snowfall, wind, and temperature 

as well as five stations to monitor stream water quality. 
Page 20 GAO-06-98 The Valles Caldera Trust

Figure 7: Fenced Riparian Area on the Caldera

Research. The research program benefits both the management of the 

Caldera and public land management. For example, hydrological research 

funded by the National Science Foundation through the University of 

Arizona will provide information to aid in the day-to-day management of 

the Caldera and will also contribute to the understanding of hydrologic 

systems overall. This research will enable scientists to understand how 

much rain the Caldera’s lands absorb and predict the amount of runoff into 

streams and rivers. As more data become available, scientists can predict 

the impact of rain and drought on water quality and forage availability on 

the Caldera and use the information to drive future management decisions 

for grazing and recreation. 

Environmental compliance and public participation. The Trust must 

comply with the National Environmental Policy Act (NEPA), which 

requires federal agencies to assess the likely environmental impacts of any 

major actions they propose. If the agency determines that a proposed 

Source: Valles Caldera Trust.
Page 21 GAO-06-98 The Valles Caldera Trust

activity will significantly affect the quality of the human environment, it 

must prepare an environmental impact statement (EIS). An EIS specifies, 

among other things, the purpose of and need for the proposed action, its 

environmental consequences, and the comparison of alternatives to the 

proposal. 

Federal agencies, in addition to complying with the Council on 

Environmental Quality’s regulations for implementing NEPA, develop 

agency-specific procedures. Before the Trust adopted its NEPA procedures 

in July 2003, it used the Forest Service’s procedures to ensure NEPA 

compliance.6

 Under the Forest Service procedures, the Trust categorically 

excluded interim fishing, hiking, road maintenance, and hazardous-fuel 

reductions from the general requirement to develop an environmental 

assessment or impact statement because it was determined that the actions 

would have no significant impact on the human environment. Under the 

Forest Service regulations, the Trust conducted environmental 

assessments of the interim grazing, noxious-weed eradication, and 

prescribed burns and did not find that these activities significantly affected 

the Caldera. The Trust expects to complete an environmental impact 

statement before establishing a permanent grazing program in 2007. 

The 2003 procedures are intended to efficiently and effectively implement 

NEPA and create a collaborative working relationship between the Trust 

and tribal governments, citizens, and federal, state, and local authorities.7

 

To obtain public views and to track and report the Trust’s land management 

actions, the Trust is developing an Internet-based system—the Stewardship 

Action Record System (StARS). Once functional (expected at the end of 

2005), StARS will allow public review and comment on all actions taken 

and provide the public with opportunities to monitor the results of ongoing 

efforts. StARS proposals have been developed for public recreation, 

grazing, infrastructure development, research projects, and fire 

management. The Trust is also exploring ways to distribute information to 

the public and obtain comments without using the Internet. 

According to the President’s Council on Environmental Quality, the Trust’s 

NEPA procedures clearly integrate progressive NEPA compliance with 

principles of adaptive management and environmental management 

6

68 FR 42460 (July 17, 2003).

7

68 FR at 42462.
Page 22 GAO-06-98 The Valles Caldera Trust

systems.8 The council also stated that the procedures allow for uncertainty 

in the decision-making process because actions are monitored and revised 

as more information becomes available.

The Trust Has Much 

Work to Do to Meet Its 

Statutory Goals

Despite the progress made, the Trust has much work to do to meet its 

mandated goals under the Preservation Act. Specifically, the Trust lacks (1) 

strategic and performance plans and programs to ensure that revenue 

streams are sufficient to achieve financial self-sustainability, (2) plans to 

minimize program risks from fire that could damage resources and legal 

liabilities that could result in catastrophic losses and reduced visitor use, 

and (3) mechanisms for monitoring progress in meeting its financial and 

other obligations, including annual audits and performance reporting. 

These shortfalls could be addressed through a more effective management 

control program, as envisioned in the Control and Results Acts. Frequent 

turnover of Board members and key staff also contributed to delays in 

implementing the components of an effective management control 

program. Without a more effective management control program, the Trust 

cannot adequately plan and implement programs or monitor progress 

toward meeting the mandated goals of the Preservation Act. 

The Trust Has Not 

Developed Strategic and 

Performance Plans with 

Measurable Goals and 

Objectives 

The Trust has not developed strategic and performance plans as required 

under the Results Act. Specifically, it has not developed a strategic plan 

that not only outlines its mission and goals but also describes how it will 

achieve and revise its goals and objectives, how performance goals relate 

to the organization’s strategic goal framework, and how it will conduct 

program evaluations. In 2005, the Trust published its Valles Caldera 

National Preserve Framework and Strategic Guidance for 

Comprehensive Management. This document provides useful information 

about the history of the Caldera, background on the Trust, and general 

goals, but discusses issues in terms of possibilities and in a broad and 

philosophic manner instead of applying a methodical and analytical 

approach to strategic planning. Board members stated that they did not 

prepare a strategic plan because they believed that the NEPA compliance 

process had to be completed before they could publish a plan. However, 

8

Letter from the Chairman, Council on Environmental Quality, to the Chairman, Valles 

Caldera Board of Trustees (Oct. 22, 2003).
Page 23 GAO-06-98 The Valles Caldera Trust

agencies are not required to prepare an EIS prior to formulating a strategic 

plan.

The Trust has not developed an annual performance plan with measurable 

goals for the activities it allows on the Caldera, which would help it 

determine whether it is accomplishing the overall strategic goals. For 

example, the performance plan could support the overall strategic goal to 

provide recreational opportunities by establishing annual measurable goals 

for the Trust’s recreation activities. An example of a measurable goal could 

be to increase public participation in hiking activities by 10 percent per 

year until the Trust has determined that the allowed level of hiking will not 

impair or damage the Caldera and is consistent with the other goals under 

the Preservation Act. The performance plan could also support the 

strategic goal to protect and preserve the Caldera, which could contain a 

measurable goal to restore and expand a specific number of wetland acres 

per year. However, the Trust cannot agree on the balance that should be 

struck between the activities that should occur on the Caldera and the 

impact of these activities on the land in order to achieve its overall goals of 

resource protection, recreation, sustained yield management, and financial 

self-sustainability.

To become financially self-sustaining by 2015, the Trust needs to generate 

enough revenue to pay for its operations and maintenance as well as 

infrastructure development costs. The Trust’s main revenue-generating 

activities are hunting, fishing, special events such as mountain biking, and 

grazing. Table 3 shows the revenue generated, by program activity, for 

fiscal year 2004. 

Table 3: Revenue Collected, by Program Activity, Fiscal Year 2004

Program Revenue

Hunting $245,885

Fishing 62,793

Special events 45,699

Grazing 42,728

Hiking 28,744

Souvenirs, books, maps 13,256

Donations 841

Other a 60,137

Total $500,083
Page 24 GAO-06-98 The Valles Caldera Trust

Source: Valles Caldera unaudited data.

Notes: The Trust’s financial statements remain unaudited as of the date of this report. 

a

Other includes lodging, filming, and other revenues generated by credit card payments not specifically 

identified to programs. 

To date, however, the Board has not developed sufficient revenue streams 

to cover its program costs or developed performance goals for becoming 

financially self-sustaining. Specifically, managers estimated that the grazing 

program lost about $55,000 in 2004 but have not computed the gain or loss 

for other programs. With total revenues of about $500,000 and total 

expenditures in excess of $5 million in fiscal year 2004, it is apparent that 

programs were operating at a loss. The Board does not plan to change the 

operation of revenue-generating programs until the Trust complies with 

NEPA.

According to the Valles Caldera National Preserve Framework and 

Strategic Guidance for Comprehensive Management, the Trust considers 

the financial self-sustainability goal as one of many goals of equal priority. 

Furthermore, according to the framework, the Trust cannot set a date for 

achieving financial self-sustainability—established as a goal to be 

accomplished by 2015 in the Preservation Act—because its federal land 

stewardship obligations do not allow it to operate grazing and recreation 

activities at a level that puts natural resources at risk. Therefore, the 

framework states, it may be reasonable to continue appropriations to cover 

environmental stewardship costs, such as those for environmental 

assessments and resources inventories, while the balance of the Trust’s 

programs operate in a self-sustaining manner. While financial selfsustainability may not be attainable in the long run, we believe it is 

premature to assume that appropriations will continue to be needed after 

the Trust’s 15th year of operation—the time period established to achieve 

the goal of self-sustainability. Moreover, the Trust is directed to report to 

Congress in its 14th year if the achievement of self-sustainability by its 15th 

year is unrealistic. In the meantime, the Trust has an obligation to continue 

to develop a strategy and implement a plan to become financially selfsustaining.

The Preservation Act also requires the Trust to report to Congress on how 

and when the Trust will become financially self-sustaining. That is, the 

Trust is to provide Congress with a schedule of decreasing appropriations 

that demonstrates how it will achieve financially self-sustaining operations 

by 2015. Such a schedule should, at a minimum, quantify the annual 

appropriations as well as other projected revenue sources needed through 

2015 and demonstrate that these sources of income will meet or exceed the 
Page 25 GAO-06-98 The Valles Caldera Trust

expected program operations and maintenance costs during that time 

frame. However, the Trust has only presented the three-phased strategy 

shown in table 4 to achieve that goal. As the table shows, the Trust’s 

Schedule of Decreasing Appropriations does not include financial 

information to show how the appropriations will decrease each year.

Table 4: The Trust’s 15-Year Strategy for Achieving a Financially Self-Sustaining 

Operation

Source: GAO analysis of the Board’s Schedule of Decreasing Appropriations. 

The Preservation Act also authorized the Trust to solicit and accept 

donations of funds, property, supplies, and services. The Trust has received 

some donations, primarily volunteer labor. Through 2005, cash donations 

totaled about $56,000, $50,000 of which was earmarked to pay the salary of 

a full-time employee to coordinate volunteer efforts. However, the Trust 

has not developed a plan for outreach to philanthropic organizations. For 

example, charitable organizations supporting national parks have been 

established to solicit donations to help support park needs. The Trust has 

discussed this option but has not actively pursued it. 

Phase Goal Task

I. Institution building 

(2001-2005)

To develop the staff and tools 

needed to manage the preserve

Hire and organize staff, 

develop science-based 

management mechanisms, 

and institute real-time 

accounting controls 

II. Infrastructure 

development (2005-

2010)

To develop the infrastructure 

needed to support land 

stewardship, public access, and 

receipts generation

Obtain appropriations and 

develop infrastructure, 

including roads, trails, 

facilities, and permanent 

recreation and public access 

programs 

III. Program 

refinement (2010-

2015)

To cultivate alternative sources of 

funds and streamline programs to 

permit decreasing appropriations

Implement previous phase 

business plans, which 

evaluate potential sources of 

funds such as access and 

activity fees, grants, sustained 

utilization of resources, private 

fund-raising, retail and 

merchandizing activities, and 

special events
Page 26 GAO-06-98 The Valles Caldera Trust

The Trust Has Not 

Addressed Risks Potentially 

Posed by Fire and Legal 

Liabilities

The Trust has not addressed program risks, including fire and legal 

liabilities that could undermine its ability to meet its financial obligations.9

 

The Trust completed a fire management plan in 2004 that adopts, by 

reference, the federal National Fire Plan. According to the National Fire 

Plan, agencies need a fire management plan to outline a decision-making 

process for responding to naturally occurring fires.10 Such a plan lays out 

the conditions under which fires must be suppressed or allowed to burn to 

benefit resources.11 The Caldera’s plan, however, has not addressed fire 

management to benefit resources, only the management of prescribed fires. 

Without a plan to manage fires for resource benefits, all naturally occurring 

fires on the Caldera must be suppressed, and suppression can be costly.12 

For example, in May 2005, a fire on the Caldera burned about 82 acres 

before being suppressed—at a cost of about $338,000. In the opinion of the 

Forest Service Region 3 Fire Manager, this fire could have been left to burn 

because it did not threaten any key resources or public infrastructure. 

Extended periods of drought and high fire risk in northern New Mexico 

could easily deplete the Caldera’s financial resources because suppression 

costs are high. 

The Trust does not have liability coverage to protect against injuries on the 

Caldera because it was uncertain whether it could acquire such insurance 

using appropriated funds. Moreover, as a government corporation, the 

Trust did not believe it could access the federal judgment fund, a fund in 

the U.S. Treasury used for the payment of final judgments against the 

United States. This lack of liability coverage and uncertainty led the Trust 

to take a cautious approach to implementing programs and increasing 

public access. According to the Board, in June 2005 the Trust clarified these 

issues with its legal counsel, who determined that legislation might be 

9

Program risks can be addressed in the strategic plan required by the Results Act and 

incorporated into the management control statement required by the Control Act. 

10The National Fire Plan is not a single document but rather several strategic documents that 

clarify wildland fire management strategies, activities, and priorities. 

11Resource benefit, also referred to as wildland fire use, involves the management of 

naturally ignited wildland fires to accomplish specific resource objectives outlined in the 

agencies’ fire management plans. 

12Recently enacted legislation requires the Secretary of Agriculture, in consultation with the 

Trust, to develop a plan to carry out fire preparedness, suppression, and emergency 

rehabilitation services on the Caldera. See 16 U.S.C. § 698v-6(g); Pub. L. No. 109-54 § 432(a).
Page 27 GAO-06-98 The Valles Caldera Trust

necessary to access the judgment fund but that it could use its own funds to 

purchase liability insurance. 

The Trust Has Not 

Developed Required 

Mechanisms for Monitoring 

Progress in Meeting 

Financial and Other Goals 

The Trust has yet to develop the mechanisms needed to monitor progress 

in meeting its financial and other obligations under the Preservation, 

Control, and Results Acts. These mechanisms include an annual financial 

audit to ensure the credibility of reported financial information and an 

annual performance report that describes progress toward achieving its 

annual performance goals. Without these mechanisms, the Trust, Congress, 

and other stakeholders cannot determine whether the Trust is on a course 

to meet all of its goals. 

Annual Audits. The Control Act requires annual financial audits for 

government corporations’ financial statements by an independent, external 

auditor selected by the head of the corporation. The results of the audits 

are to be reported to the head of the government corporation and to 

Congress. The Board has yet to conduct an audit because it has not 

produced auditable financial statements. 

In 2003, the Trust contracted with an independent accounting firm for 

auditing services, including an audit of the (1) statement of financial 

position of the Trust and (2) related statement of activities and cash flows, 

as of September 30, 2003. However, according to the Trust’s former 

business manager, the audit firm recommended that the audit be postponed 

until 2004 since the Trust’s financial records had only recently been 

established on the new financial system operated by the National Business 

Center. The Trust agreed with this recommendation. As of October 2005, 

the Trust had not contracted with an independent firm to audit its annual 

financial statements. Also in 2003, the Trust contracted with another firm to 

review the payroll process and controls for each of the revenue sources 

and to recommend improvements. According to Trust managers, in fiscal 

year 2005, financial policies and procedures were still not in place and 

financial statements had not been produced. The managers told us that 

they were in the process of establishing management controls and 

attempting to reconstruct prior years’ expenditures in preparation for their 

first external audit. 

Annual Performance Reports. The Control, Results, and Preservation Acts 

require the Trust to report annually to Congress on certain aspects of its 

operations. Collectively, these acts require a statement of financial 

position, a statement of operations, a statement of cash flows, 
Page 28 GAO-06-98 The Valles Caldera Trust

reconciliation to the budget report, a management controls statement, a 

report on a financial statement audit, and reports on annual performance. 

The annual reports to Congress the Trust has prepared for fiscal years 2001 

through 2004 under the Preservation Act describe the interim programs the 

Trust has implemented and summarize the prior years’ accomplishments. 

The Trust may not have been able to prepare annual reports to Congress 

that address requirements of the Control Act partly because the Trust has 

not produced a budget report or financial statements. In addition, because 

the Trust has not developed annual performance plans with performance 

goals, it has not produced a performance report required by the Results 

Act. 

Turnover of Board Members 

and Staff Contributed to 

Delays in Implementing 

Components of a More 

Effective Management 

Control Program Needed to 

Meet Statutory Goals

Effective management of an organization’s workforce—its human capital—

is essential to achieving results and an important part of internal control. 

Operational success is possible only when the right people for the job are 

on board and are provided the right training, tools, structure, incentives, 

and responsibilities. Management should ensure that it obtains a workforce 

with the required skills that match those necessary for achieving 

organizational goals. As part of its human capital planning, management 

should also consider how best to retain valuable employees, plan for their 

eventual succession, and ensure continuity of needed skills and abilities. 

Excessive or unexpected turnover of staff can indicate problems with an 

organization’s management control program and contribute to delays in 

implementing programs needed to achieve established goals. 

Throughout its short history, the Trust has experienced significant turnover 

among Board members and staff. According to the Preservation Act, three 

of the initial Board members are appointed for 2 years, while four other 

Board members are initially appointed for 4-year terms. All subsequent 

appointments to these positions are for 4 years. At the end of the first 2-

year term, the Board operated for about 5 months before the President 

appointed replacements. In January 2005, four more board members 

completed their terms, and the Board operated for 4 months before the 

President appointed three of the four replacements. As of October 2005, the 

President had not appointed anyone for the fourth position, which has now 

been vacant for about 10 months. 

The Trust has also experienced high turnover among key staff. The Trust’s 

first executive director served 18 months, resigning as director in March 

2004. The position remained vacant for about 7 months while the Trust 

searched for a replacement. Although this position was filled in October 
Page 29 GAO-06-98 The Valles Caldera Trust

2004, the executive director resigned after 10 months of service. Other key 

positions became vacant in 2004 and 2005, including the Trust’s controller, 

business manager, programs director, chief administrative officer, 

communications manager, and cultural program coordinator. As of October 

2005, the executive director, programs director, chief administrative officer, 

cultural resources coordinator, and geospatial information systems 

coordinator positions remained vacant. The business manager position was 

abolished. Table 5 shows the turnover of key Trust staff in 2004 and 2005 

and the current status of these positions. 

Table 5: Turnover of Key Trust Staff in 2004 and 2005

Source: GAO analysis of the Trust’s personnel records.

According to some stakeholders we spoke with, the turnover of Board 

members and other key staff has contributed to the Trust’s inability to 

develop a strategic and performance plan with measurable goals and 

objectives as well as to delays in implementing programs. For example, the 

NEPA environmental assessment related to the grazing program was 

postponed when four Board members completed their 4-year terms in 

January 2005. Some staff stated that the lack of consistent leadership and 

the lack of progress in organizational and program development has 

contributed greatly to staff turnover. 

Conclusions To meet the mandated management goals of the Caldera, the Trust faces 

multiple challenges—balancing conflicting goals and objectives for 

Key positions

Date

hired

Date

vacated

Replacement 

hired

First executive director Oct. 2001 March 2004 Oct. 2004

Second executive director Oct. 2004 Sept. 2005 Vacant 

Controller July 2002 Nov. 2004 Sept. 2005

Programs director June 2005 Sept. 2005 Vacant

Cultural resources coordinator Sept. 2003 Aug. 2005 Vacant

Communications manager Jan. 2003 May 2005 Vacant

Business manager June 2002 Apr. 2005 Position 

abolished

Chief administrative officer Dec. 2004 Sept. 2005 Vacant

Geospatial information systems 

coordinator

Aug. 2003 Sept. 2005 Vacant
Page 30 GAO-06-98 The Valles Caldera Trust

resource development and use with preserving and protecting these 

resources for sustained future recreational enjoyment of the Caldera. While 

the Trust has made some progress in achieving its mandated goals, its 

further progress is in doubt because it has not developed a well-defined 

management control program, which is collectively encompassed in the 

mandates governing the Caldera’s operations. Such a program would 

include strategic and performance plans, measurable goals and objectives 

and monitoring plans, annual performance reports, and a strategy for 

achieving financial self-sustainability. These mechanisms would help 

provide greater accountability for achieving results and enhancing decision 

making. Furthermore, an effective management control program—to 

include human capital initiatives designed to retain needed skills and 

provide timely replacement of lost skills—can ease the effects associated 

with turnover in the Board and staff.

Achieving financial self-sustainability by 2015 is only one of many goals and 

objectives set forth in the Preservation Act, but it is key to the Trust’s 

success in managing and operating the Caldera without federal funds. The 

Trust assumes that it may have to continue to rely on federal funding after 

2015, but this assumption is premature because the Trust has not focused 

on the actions it needs to take to become self-sustaining, such as expanding 

or establishing new revenue-generating programs or identifying other 

nonfederal revenue sources (donations). Furthermore, without developing 

programs to minimize risks associated with implemented programs, the 

Trust cannot manage the uncertainty surrounding liability and fire 

suppression costs, which could undermine its efforts to achieve financial 

self-sustainability. Finally, without an independent financial statement 

audit, the Trust cannot demonstrate to Congress and other stakeholders 

that it is developing a sound financial base and that reported financial 

information is credible. 

Recommendations for 

Executive Action

To help ensure that the Trust meets its goals under the Preservation Act 

and to improve management oversight, accountability, and transparency 

under the Control Act and the Results Act, we are making the following 

seven recommendations to the Valles Caldera Board of Trustees.

To establish a more effective management control program, we 

recommend that the Board develop 
Page 31 GAO-06-98 The Valles Caldera Trust

• a strategic and performance plan that identifies measurable goals and 

objectives for protecting and preserving the Caldera, providing 

recreation, sustaining yield, and becoming financially self-sustaining;

• a plan for becoming financially self-sustaining that includes financial 

information detailing how and when the Trust will try to achieve this 

goal; 

• mechanisms for periodic performance monitoring and reporting, 

including annual performance reports that enable Congress and the 

Trust to track progress in achieving the Trust’s program goals and 

objectives; and

• a plan for the timely replacement of key personnel.

To increase accountability to Congress and other stakeholders, we also 

recommend that the Board

• obtain the annual financial statement audit for 2005, 

• provide a status report or the auditor’s final opinion on the Trust’s 

financial condition in its January 2006 annual report to Congress, and

• arrange to conduct future annual financial audits in a timely manner.

Trust Comments and 

Our Evaluation

We provided the Valles Caldera Board of Trustees with a draft of this report 

for review and comment. The Board provided written comments that are 

included in appendix I. The Board generally agreed with the accuracy of 

the findings, validity of the conclusions, and soundness of the 

recommendations. It also provided additional insights into four specific 

areas. First, it stated that it has, over the last several years, engaged in 

extensive strategic planning sessions to lay the foundation for developing 

more detailed operating plans once the highest level strategic planning 

work is completed and sufficient experience has been obtained in 

conducting interim programs. It also said that it has adopted, in 2005, a set 

of strategic goals, the achievement of which is both measurable and time 

specific. We acknowledge that in 2005 the Board announced four broadly 

stated strategic goals. However, as stated in the report, the Trust has not 

developed strategic and performance plans that include all required 

elements of the Results Act, which provides a methodical and analytical 

approach to strategic planning. 
Page 32 GAO-06-98 The Valles Caldera Trust

Second, with regard to risks posed by fire and legal liabilities, the Board 

said it was in the process of completing a Fire Use Plan that addresses the 

use of management-ignited fire as well as the use of fire originating from 

natural ignitions and that Congress has adopted legislation to provide the 

Board with access to federal fire suppression funds. These actions will 

enhance the Board’s ability to evaluate natural ignitions and apply the 

appropriate management response. We agree that it is important to 

complete the Fire Use Plan, which, according to the Board, will be finalized 

by May 2006. As mentioned in the report and in the Board’s comments, 

having a sound fire management plan will provide greater assurance that 

proper management actions are taken in the event of a wildland fire. The 

Board also said it has pursued clarification of whether the Board can 

access the federal government’s judgment fund and has obtained a legal 

opinion from an independent firm that concludes that legislation might be 

necessary to access the judgment fund but that the Trust could use its own 

funds to purchase liability insurance. We revised the report to include this 

clarification and agree that the Trust should use its own funds to purchase 

liability insurance. 

Third, the Board agreed that the timely appointment of Board members and 

the management of its human resources are essential to achieving positive 

results. In this regard, it mentioned that it has revised its bylaws to effect 

the orderly transition of Board members, so as to mitigate the impact of 

possible delays in the appointment process. It also said it had adopted a 

new organizational structure and performance review process for 

employees. The change in the Board’s bylaws has the effect of allowing the 

Board to make important decisions in the absence of a full Board due to 

delays in appointments of Board members. We agree this is important given 

that the replacement of Board members is out of its control. The Board also 

recognized that it has experienced a relatively high level of Trust employee 

turnover, which it said has “occurred in a constructive fashion, void of 

grievances or formal complaints.” Nonetheless, the fact remains that high 

turnover, particularly of key employees, can cause disruption to an 

organization and affect its ability to accomplish established goals. As the 

report states, an effective management control program has a process in 

place for the timely replacement of key personnel lost to turnover. 

Establishing such a process is within the purview of the Board and 

important to effective management of an organization’s human capital. 

Finally, the Board stated that while the Trust was fully committed to the 

goal of financial self-sustainability, the Trust recognizes that to obtain that 

goal, it needs to streamline required federal overhead stemming from 
Page 33 GAO-06-98 The Valles Caldera Trust

compliance with federal laws and statutes and to control administrative 

and operating costs. It said it was committed to developing the 

management plans required for conversion of financially attractive 

programs to regular status and acquiring capital resources. Furthermore, it 

stated that the Board takes the goal of financial self-sustainability seriously 

and on par with other provisions of the Preservation Act and thus disagreed 

with the implication in the report that it did not consider the financial selfsustainability goal as a priority. Because the Board’s published 

management framework, entitled Valles Caldera National Preserve 

Framework and Strategic Guidance for Comprehensive Management,

states that the Trust considers the financial self-sustainability goal as only 

one of many goals, to avoid ambiguity, we revised the report’s language to 

state that the Trust considers the self-sustainability goal as one of many 

goals of equal priority. Regardless, the seriousness of the Board’s actions in 

addressing this goal would, as mentioned in the report, be further enhanced 

by demonstrating a more aggressive approach to identifying additional 

revenue sources that would help the Trust come closer to achieving 

financial self-sustainability. 

Scope and 

Methodology

We obtained and analyzed information from the Trust on its activities, 

relevant laws, regulations, program documents, and related materials, and 

met with Trust officials responsible for major activities, such as recreation, 

resource inventorying, construction, and financial management. Since the 

Caldera was initially under the management of the Forest Service, we 

interviewed Forest Service officials and reviewed available documentation 

supporting activities undertaken during this time. We also visited the 

Caldera to observe the actions taken to date toward meeting the Trust’s 

statutory goals. The financial statements of the Trust have not been 

independently audited. We conducted limited testing of these data and 

discussed these data with key Trust officials. We describe issues related to 

these financial data in the body of this report. We assessed and determined 

that the nonfinancial data, such as participation in recreation activities and 

levels of livestock grazing, were sufficiently reliable for the purposes of this 

report. We conducted our work from January 2005 through October 2005 in 

accordance with generally accepted government auditing standards.
Page 34 GAO-06-98 The Valles Caldera Trust

We are sending copies of this report to interested parties. We will also make 

copies available to others upon request. In addition, this report will be 

available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

at (202) 512-3841 or nazzaror@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix III.

Robin M. Nazzaro

Director, Natural Resources and Environment
Page 35 GAO-06-98 The Valles Caldera Trust

List of Committees

The Honorable Pete V. Dominici

Chairman

The Honorable Jeff Bingaman

Ranking Minority Member

Committee on Energy and Natural Resources

United States Senate

The Honorable Richard Pombo 

Chairman

The Honorable Nick J. Rahall II

Ranking Minority Member

Committee on Resources

House of Representatives
Page 36 GAO-06-98 The Valles Caldera Trust

Appendix I

Comments from the Valles Caldera Trust AAppenednxidexiIs
Appendix I

Comments from the Valles Caldera Trust

Page 37 GAO-06-98 The Valles Caldera Trust
Appendix I

Comments from the Valles Caldera Trust

Page 38 GAO-06-98 The Valles Caldera Trust
Appendix I

Comments from the Valles Caldera Trust

Page 39 GAO-06-98 The Valles Caldera Trust
Page 40 GAO-06-98 The Valles Caldera Trust

Appendix II

Guiding Principles of the Valles Caldera Trust ApendxiI

1. Future generations. Administer the Preserve with the long view in 

mind, directing efforts toward the benefit of future generations.

2. Protection. Recognizing that the Preserve imparts a rich sense of 

place and qualities not to be found anywhere else, commit to the 

protection of its ecological, cultural, and aesthetic integrity.

3. Integrity. Strive to achieve a high level of integrity in the stewardship 

of the lands, programs, and other assets in the Trust’s care. This 

includes adopting an ethic of financial thrift and discipline and 

exercising good business sense.

4. Science and adaptive management. Exercise restraint in the 

implementation of all programs, basing them on sound science and 

adjusting them consistent with the principles of adaptive management.

5. Good neighbor. Recognizing the unique heritage of northern New 

Mexico’s traditional cultures, be a good neighbor to surrounding 

communities, striving to avoid negative impacts from Preserve 

activities and to generate positive impacts. 

6. Religious significance. Recognizing the religious significance of the 

Preserve to Native Americans, the Trust bears a special responsibility 

to accommodate the religious practices of nearby tribes and pueblos, 

and to protect sites of special significance.

7. Open communication. Recognizing the importance of clear and open 

communication, commit to maintaining a productive dialogue with 

those who would advance the purposes of the Preserve and, where 

appropriate, to developing partnerships with them.

8. Part of a larger whole. Recognizing that the Preserve is part of a 

larger ecological whole, cooperate with adjacent landowners and 

managers to achieve a healthy regional ecosystem.

9. Learning and inspiration. Recognizing the great potential of the 

Preserve for learning and inspiration, strive to integrate opportunities 

for research, reflection, and education in the programs of the Preserve.

10. Quality of experience. In providing opportunities to the public, 

emphasize quality of experience over quantity of experiences. In so 

doing, and in reserving the right to limit participation or to maximize 
Appendix II

Guiding Principles of the Valles Caldera Trust

Page 41 GAO-06-98 The Valles Caldera Trust

revenue in certain instances, commit to providing fair and affordable 

access for all permitted activities.
Page 42 GAO-06-98 The Valles Caldera Trust

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov

Staff 

Acknowledgments

In addition to the contact named above, Roy Judy, Assistant Director; 

Christine Bonham; Doreen Feldman; Lisa Knight; Tom Kingham; Julian 

Klazkin; Allen Lomax; Cynthia Norris; Judy Pagano; Dawn Shorey; Carol 

Herrnstadt Shulman; and Maria Vargas made key contributions to this 

report.

(360525)
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